dax maintain bullish bias above 10180160 support 1824192016

Daily Outlook, Tues 02 August 2016

(Click to enlarge charts)

What happened earlier/yesterday

The Germany 30 Index (proxy for the DAX futures) has shaped a pull-back in price action from yesterday’s gapped up high of 10474 as market participants digest the results of the latest stress test on European banks conducted by the European Banking Authority that indicate that European banking sector as a whole has enough capital to survive a fresh round of financial crisis except for Italy’s Monte dei Paschi, UK’s Royal Bank of Scotland and Ireland’s Allied Irish Banks.

Key Eurozone and Germany economic data releases/events for today:

Eurozone Producer Price Index for Jun @0900 GMT (0.4% m/m & -3.5% y/y consensus)

Key elements

Late last week, the Germany 30 Index has staged a bullish breakout finally from its former “Expanding Wedge” range top (depicted in dotted purple) in place since 21 April 2016 high now turns pull-back support at 10180/160 (see 4 hour chart).
The aforementioned pull-back support of 10180/160 also confluences with the 23.6% Fibonacci retracement of the recent rally from 06 July 2016 low to yesterday high of 10474.
The 4 hour Stochastic oscillator has started to reverse up with the oversold region and the shorter-term hourly Stochastic oscillator is now coming close to its extreme oversold level. These observations suggest that the downside momentum of yesterday’s pull-back in price action is waning which increases the probability of an upturn in price action.
The key resistance to watch now stands at 10530/650 which is the significant zone as per mentioned in our medium-term weekly outlook/strategy published yesterday (click here for a recap).

Key levels (1 to 3 days)

Intermediate support: 10225

Pivot (key support): 10180/160

Resistances: 10530/650

Next support: 10060 (medium-term pivot)

Conclusion

Maintain bullish bias for push up towards significant resistance zone. Any potential pull-back is likely to be held by the intermediate support of 10225 with a maximum limit set at the 10180/160 daily short-term pivotal resistance before the potential push up materialises to target the 10530/650 resistance.

On the other hand, a break below the 10180/160 short-term pivotal support is likely to put the bulls on hold for another round of slide towards this week’s medium-term pivotal support set at 10060.

Disclaimer

This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this email, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs. All queries regarding the contents of this material are to be directed to City Index, a trading name of GAIN Capital Singapore Pte Ltd.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.

This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

StoneX Financial Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit www.cityindex.com/en-sg/terms-and-policies for the complete Risk Disclosure Statement.

ALL TRADING INVOLVES RISKS. LOSSES CAN EXCEED DEPOSITS.

City Index is a trading name of StoneX Financial Pte. Ltd. (“SFP”) for the offering of dealing services in Contracts for Differences (“CFD”). SFP holds a Capital Markets Services Licence issued by the Monetary Authority of Singapore for Dealing in Exchange-Traded Derivatives Contracts, Over-the-Counter Derivatives Contracts, and Spot Foreign Exchange Contracts for the Purposes of Leveraged Foreign Exchange Trading. SFP is also both Derivatives Trading and Clearing member of the Singapore Exchange (“SGX”). SFP is a wholly-owned subsidiary of StoneX Group Inc.

The information provided herein is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to invest, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk.

The information does not represent an offer of, or solicitation for, a transaction in any investment product. Any views and opinions expressed may be changed without an update. To understand the risks and costs involved, please visit the section captioned “Important Information” and the “Risk Disclosure Statement”.

The information herein is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation.

StoneX Financial Pte. Ltd. 1 Raffles Place, #18-61, One Raffles Place Tower 2, Singapore 048616. Tel: 6309 1000. Co. Reg. No.: 201130598R.

This advertisement has not been reviewed by the Monetary Authority of Singapore.